How Quovo’s /incomes Endpoint Can Increase Underwriting Confidence

Natalie Giannangeli
Nov 19 2018

Online loan origination has made lending more user friendly, but some signs show it could also could be contributing to an increase in mortgage fraud. According to a new report from CoreLogic, the risk of mortgage fraud had a year-over-year increase of over 12 percent. More specifically, income fraud saw the biggest increase: from Q2 2017 to Q2 2018, CoreLogic estimates that income falsification rose by more than 22 percent. There are even websites that use technology to assist people with income falsification, like fake pay stub generators and robocallers that will “confirm” employment. However, we see technology through enhanced account connectivity as the key to preventing fraud.

With Quovo’s account connectivity, lenders of all types—including mortgage, personal, and auto—have a window into applicants’ financial accounts. More specifically, our income endpoints provide lenders with detailed information about income so they can make more confident decisions about a borrower’s credit risk.

Our /incomes endpoint provides a comprehensive summary of regular and irregular income streams. For each applicant the lender connects with Quovo, their income is broken down into different sources based on frequency, size, and source. The endpoint also ranks each stream by what portion of the overall income it makes up.

During origination, applicants traditionally enter their estimated salary then later turn in pay stubs or tax returns as proof. Instead of depending on the applicant for accurate information, lenders can connect the applicant’s’ financial accounts and verify their income using /incomes. For applicants, this type of flow offers:

A streamlined process– Rather than manually uploading bank statements and pay stubs, consumers simply connect their bank account and the rest is taken care of by the API.

Faster approval– Loan decisioning typically takes several days to a week, but account connectivity can expedite the decision with quick analysis of financial data.

From the lender’s perspective, having an overview of applicants’ income is not only a better way to fight fraud. Access to more information about income can also broaden the pool of potential borrowers and create a more inclusive origination process. The current origination process relies heavily on credit score. As a result, the 45 million Americans with no credit score, either due to having “no file,” no credit history at all, or a “thin file,” lacking enough information to score their credit, are severely disadvantaged. Instead, connectivity to income data helps paint a more robust picture of the person’s ability to repay a loan. As a result, the applicant receives a fairer assessment of their credit risk, and the pool of potential borrowers widens to include to those who wouldn’t qualify based on FICO alone.

While the /incomes endpoint gives high-level information about an income profile, the /income_transactions endpoint details the raw data used to create the summary. After viewing a summary of the streams via the /incomes endpoint, /income_transactions breaks down the unanalyzed transaction data so lenders can better understand the evaluation.

Similar to other endpoints of our API, /incomes gives our clients more insights and information about their end users’ financial lives. For lenders specifically, direct connectivity to an applicant’s bank account reduces the room for errors, estimations, “misrepresentations,” and outright fraud. With more reliable information about income, lenders can be more certain they’re making the right decisions about who receives their credit.

Contact our team if you’re looking for an account connectivity provider that can streamline origination and improve income verification.